Returns to Higher Education in China: Evidence from the 1999 Higher Education Expansion Using Fuzzy Regression Discontinuity

34 Pages Posted: 28 Aug 2018

See all articles by Fengyan Dai

Fengyan Dai

Nanjing University of Finance and Economics

Fang Cai

Chinese Academy of Social Sciences (CASS) - Institute for Population and Labor Economics

Yu Zhu

University of Dundee

Abstract

China experienced a 47% expansion in higher education enrolment between 1998 and 1999, and a six-fold expansion in the decade to 2008. In this paper, we explore a fuzzy discontinuity in the months of births induced by the expansion to study the returns to higher education in China. We find that the mean years of education increased by roughly one full year around the cut-off point of the 1999 expansion as defined by months of births. Importantly, each additional year of university education induced by the 1999 higher education expansion increases monthly wage income by 21%, whereas the corresponding OLS estimate is only 8%. Our findings are insensitive to alternative window widths, functional forms, or the exclusion of the self-employed. Moreover, the returns to degrees also appear to vary by gender, with lowers returns to women except when they are the only child in the family.

Keywords: returns to higher education, higher education expansion, regression discontinuity design, China

JEL Classification: I23, I26

Suggested Citation

Dai, Fengyan and Cai, Fang and Zhu, Yu, Returns to Higher Education in China: Evidence from the 1999 Higher Education Expansion Using Fuzzy Regression Discontinuity. IZA Discussion Paper No. 11735, Available at SSRN: https://ssrn.com/abstract=3238560

Fengyan Dai (Contact Author)

Nanjing University of Finance and Economics

Nanjing
China

Fang Cai

Chinese Academy of Social Sciences (CASS) - Institute for Population and Labor Economics ( email )

5 Jian-guomen Nei Dajie
Beijing 100836
China

Yu Zhu

University of Dundee ( email )

Dundee, Scotland DD1 4HN
United Kingdom

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